Boomtown, 1870s: Decade of Bonanza, Bust and Unbridled Racism

First of two parts

I am guessing that on some level lots of us buy into the stereotype of the Bay Area as a hotbed of progressive activism. A place that's bluer than blue, that's quick to march, that's home to the only member of Congress to vote against going to war in Afghanistan after 9/11. A place that's proud to have fostered the Free Speech Movement, the Black Panthers and the fight for gay (now LGBTQ) liberation.

It's true that street activism is very much alive here. The last six years, for instance, have seen what amounts to one long campaign against police violence and social injustice -- a campaign that was sparked by the police killing of BART passenger Oscar Grant, became entwined with the economic justice demands of the Occupy movement and that continues today as part of the Black Lives Matter demonstrations.

1870s San Francisco was a sort of perverse twin to today's city, home to an activism that was anything but 'progressive.'

Amid those sporadic eruptions, the tech boom got going and itself became enmeshed in protest. You know the story: Armies of mostly young and highly paid programmers, engineers and entrepreneurs -- and the companies that employ them -- are remaking large swaths of San Francisco, Oakland, the Peninsula and Silicon Valley. Rents have soared, lower-income tenants have lost homes and familiar local businesses, watering holes, art galleries and nonprofits have been priced out.

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Overnight, or so it seemed, fleets of huge corporate shuttle buses appeared on the streets to whisk the better-paid-than-most-of-us technologists to and from Silicon Valley. Anti-eviction activists turned the vehicles into an internationally recognized symbol for wealth inequality and community displacement.

So that's our tradition of activism as it looks in the early 21st century.

But when you get out your pick and shovel (or your library card, Kindle and Web browser) and start digging through the dense strata of protest, agitation and political turbulence that have been laid down here over the decades, you eventually find yourself in 1870s San Francisco, a sort of perverse twin to today's city. It was a place of magnificent wealth displayed amid a full-on depression. It was crowded with desperate and disillusioned people, and it was home to an activism marked by unbridled intolerance and racism directed at one group of immigrants who had ventured across the Pacific to join the Gold Rush.

By 1870, San Francisco had experienced two major booms. The first was touched off in 1848 by the Gold Rush and transformed a village of about 800 people into a city of 35,000 in just five years. When the flow of gold from the Sierra slowed in the mid-1850s, San Francisco suffered its first prolonged economic slump. Population growth slowed and the city's real estate bubble collapsed.

But the downturn didn't last long. Another boom got under way in 1859 with the discovery of Nevada's Comstock Lode in the mountains northeast of Lake Tahoe. The Comstock was one of the biggest silver finds in history and touched off a new kind of mining bonanza, one in which speculators, bankers and everyday investors all joined the rush.

The Comstock mines produced more than $300 million in silver in a little more than two decades, wealth that was largely controlled in San Francisco and helped spark the city's rapid growth -- from about 57,000 in 1860 to 150,000 in 1870 and 233,000 in 1880. (The Comstock also drove a secondary mining boom in the hills just south of the small town of San Jose, where mines in the New Almaden district produced mercury crucial to the gold and silver refining process.)

The wealth extracted from the mines was one thing. But there was another source of wealth to be tapped, too, for those who knew how.

Development of the Comstock was financed largely by investment and speculation on San Francisco's new stock exchange, which focused on trading shares in mining concerns. For a time, everyone wanted in on the game. Here's how Gary Kamiya describes the local Comstock mania in his popular history, Cool Gray City of Love:

San Francisco had always been a gambler’s town, but during silver’s 15-year heyday, virtually the entire population succumbed to a gambling mania unlike any it had seen before or would ever see again. What made speculating in mining stocks so addictive was that their values fluctuated so wildly. A rumor that a new vein had been found could cause the value of a mine’s stock to go up 10 times; it could plummet a week later. As a result, anyone could make a fortune literally overnight, and many did. The entire city buzzed with tales of chambermaids who bought the rooming houses they had worked in a few weeks earlier and of former ditchdiggers riding down newly fashionable Kearny Street in opulent carriages.

But those who got rich -- and for the most part stayed rich -- were a small group of bankers and investors who controlled both the mines and the exchange.

"By controlling information from the mines," historian Gray Brechin writes in Imperial San Francisco, this group "had an advantage available to few other gamblers on the Exchange. The barest hint of a new discovery in the mines triggered mayhem in San Francisco resembling religious rapture or riot. ... Those who had the latest information ... used it to manipulate the market to aggrandize their fortunes from the investments of others."

Both Kamiya and Brechin quote Robert Louis Stevenson's description of the scene and the process that was at work as he viewed it from a neighborhood he termed "the hill of palaces":

From Nob Hill, looking down upon the business wards of the city, we can decry a building with a little belfry, and that is the stock exchange, the heart of San Francisco; a great pump we might call it, continually pumping up the savings of the lower quarters into the pockets of the millionaires upon the hill.

An 1891 view of Nob Hill, looking north up Powell Street. To the left (west) of Powell at the top of the hill are the mansions of Leland Stanford, Mark Hopkins and James C. Flood. (San Francisco Public Library History Center)

The Comstock made several of those millionaires who built palaces on the hill, including James Flood, whose mansion survives today as the Pacific Union Club, at California and Mason streets. Others who chose Nob Hill as a showcase for their fortunes included Leland Stanford, Mark Hopkins, Collis Huntington and Charles Crocker, the Big Four, the principal founding investors in the Central Pacific, North America's first transcontinental railroad.

While the railroad made the Big Four rich, it didn't turn into the engine of prosperity that promoters promised or that San Francisco expected when it was finished in 1869. On the one hand, the road's completion sent thousands of workers, many of them Chinese immigrants, looking for new jobs. On the other, the railroad served as a conduit for masses of people coming in search of work and land.

There was little land to be had, though. By one account 0.2 percent of the state's population -- that's two-tenths of 1 percent -- controlled half the land, and huge tracts had been granted to the railroads. Jobs were few, too, as the economy of San Francisco and California as a whole sank into a funk.

"The particular point we have in view is the lamentable lack of employment for laborers, which is so crying an evil of the day," wrote the San Francisco Evening Bulletin in early 1870. "There are those who estimate the proportion of laborers in California who are out of work ... as high as twenty percent, or one-fifth of the entire mass of inhabitants."

'There are those who estimate the proportion of laborers in California who are out of work ... as high as twenty percent, or one-fifth of the entire mass of inhabitants.'San Francisco Evening Bulletin, 1870

One East Coast commentator wrote that California and San Francisco were experiencing a "revolution," plunging back to earth after the excesses of the Gold Rush and Comstock decades:

"Speculation was the groundwork of all her wealth and her growth; uncertainty and irregularity were the laws of her prosperity. High prices and vast profits, a grand and reckless way of business and of life pervaded all her society and her movements," wrote Massachusetts newspaper editor Samuel Bowles, who twice visited the city in the mid- and late 1860s.

Bowles characterized the situation as the city and state "struggling into conformity with the modes and morals and money of the nation," a transition he observed provoked widespread discontent.

"At first the people seemed stunned with the revelation and the revolution," Bowles said. "They cursed the railroad, they cursed the Bank of California, and they cursed the Chinese, one and all, as parents of their disappointment."

"Cursing the Chinese" was something of a constant among California's white population in the state's early decades.

The Chinese, of course, had joined the rush to what they called Gold Mountain in 1849, along with immigrants from the eastern U.S. states, Western Europe, Mexico, Chile, Peru, Hawaii, Australia and New Zealand.

White California was not, by and large, a particularly welcoming place for the new arrivals from Mexico and lands south, many of whom were experienced miners when they arrived in the gold fields. Historians note they played an important role in teaching the American novices how to find and remove gold from the streams and hillsides where it lay. Their reward was a state tax on foreign miners and repeated episodes of violence and mistreatment.

Worse was in store for the Chinese.

California -- most of the white population, its lawmakers and their enactments -- reserved a sustained hostility for these early Asian immigrants almost from the first. Arriving in the gold fields, they were generally excluded from all but the poorest mining claims -- those that had already been worked and believed exhausted. They were often the target of violence and were, like blacks and Indians, denied the right even to testify in court against those who robbed and attacked them.

What was the source of the animus, which was soon to have official backing?

It was the practice of the Chinese then as now to huddle together in special and confined quarters and to dress and live as they had dressed and lived in China. Almost all their clothing and most all their food, which consisted in great part of rice, were imported from their native land. As a class they were harmless, peaceful and exceedingly industrious; but, as they were remarkably economical and spent little or none of their earnings except for the necessaries of life and this chiefly to merchants of their own nationality, they soon began to provoke the prejudice and ill-will of those who could not see any value in their labor to the country.

In short, [the Chinese] worked too hard (often for less pay than others were willing to accept), saved too much, and spent too little. In addition, they looked and behaved differently from the majority population. Beneath all the surface rationalizations, this was to be the gravamen of the complaint against the Chinese through the many phases of the anti-Chinese movement in California.

That movement led to a series of state and local laws meant to force the Chinese to leave California or make it extremely difficult or expensive to stay. The tax on foreign miners was increased repeatedly. The Legislature enacted a variety of fees and taxes on arriving Chinese immigrants, then a tax of $2.50 month (something like $60 in today's money) on most Chinese residents. Chinese children were excluded from the state's public schools.

'We would beg to remind you that when your nation was a wilderness ... we exercised most of the arts and virtues of civilized life.'Norman Asing,
Chinese-American merchant

San Francisco's Board of Supervisors joined in the anti-Chinese campaign with a long list of discriminatory ordinances. One attempted to ban Chinese peddlers from the common practice of carrying their goods on poles. Other laws attempted to impose punitive fees on the city's large number of Chinese laundries and to regulate the size of rooms in lodging-houses.

As McClain notes, the Chinese didn't take this continuing assault on their liberty lying down. As the anti-Chinese agitation got under way in the early 1850s, Gov. John Bigler sent the Legislature a special message urging a program of taxes and other measures to stop Chinese immigration.

Among his justifications: the unfounded claim that the Chinese arriving in California were "coolies" -- essentially indentured servants who were little better than slaves for the Chinese contractors who hired them. He also argued that, in essence, the Chinese were inferior, ignorant of the enlightened American way of doing things: incapable, for instance, of understanding the importance of or keeping an oath of citizenship.

Bigler's message brought a response from a Chinese merchant in San Francisco named Norman Asing, who blasted the logic of excluding productive immigrants and questioning who in California really represented an inferior culture.

"We would beg to remind you that when your nation was a wilderness, and the nation from whom you sprung barbarous, we exercised most of the arts and virtues of civilized life," Asing wrote.

More important, McClain says, is that leading members of the Chinese community, centered in San Francisco, approached the Legislature directly to try to stem the tide of punitive taxes and other laws. When that effort met with only modest success, they challenged the anti-Chinese laws in court and got the worst of them thrown out. In the 1850s, for instance, Chinese plaintiffs sued the state to overturn a tax to be levied against all arriving Chinese passengers and another that sought to ban Chinese from landing at the state's ports. Both laws were struck down for interfering with federal powers.

Likewise in the late 1860s and early '70s, Chinese Californians waged long and ultimately successful campaigns to win the right to testify in court and to end enforcement of the discriminatory tax on foreign miners.

The consistency with which courts struck down the anti-Chinese laws did little to dampen the anti-Chinese movement. Calls for an end to Chinese immigration grew louder as California and San Francisco bumped from one economic trough to another in the 1870s.

Hubert Howe Bancroft's History of California said the stock exchanges "were weird in their excitement, the brokers crying to one another, like the unseemly harpies of Dante's hell, every cry carrying the Comstock higher."

"If people were wild in those cases or in the excitement of 1872, they now became, so to speak, insane," wrote T.H. Hittell in his own history of the period. He said everyone wanted in:

The race for wealth, which was simply a race to secure stock in the bonanza mines, attracted nearly everybody. The man or woman, who had or could raise money and did not invest, was the exception. Not only the profits of common trade, manufactures and agriculture but often the principal, the slow accumulations of industry, the hard-earned wages of labor, the salaries of professors and preachers, the fees of lawyers and physicians, the deposits in savings banks, the produce of mortgaged homesteads, the money that was inherited or that could be borrowed -- nearly all found their way into the mining-stock market.

William C. Ralston, president of the Bank of California, drowned in San Francisco Bay the day after a run on the bank revealed it to be bankrupt. (Wikimedia Commons)

It didn't take long for the speculation to exact its toll. One of the first and most notable investors ruined in the 1875 fall of mining stocks was San Francisco's William C. Ralston. His Bank of California, the biggest financial institution in the state, was forced to close for a time because of losses incurred in his secret speculation in the mines. Ralston drowned off North Beach the day after a run on the bank, a death many presumed to be a suicide.

A plunge in mining stocks in 1877 wiped out investors large and small in the city and led to a renewed financial panic. Economic conditions were made worse by the effects of a drought that wiped out most of the year's wheat crop and devastated the cattle industry. The effects of a nationwide depression added to the malaise.

In a city with a population that now exceeded 200,000, about one in five adult men were out of work. Charities in the city were feeding about 2,000 people a day. Only the very wealthiest, the insiders who had developed the Comstock mines and those who had built the railroads -- those folks who had put up their palaces on Nob Hill -- seemed to be immune from the hard times that had descended over the city in the summer of 1877.

"Trade was bad, work was scarce, and for what there was of it the Chinese, willing to take only half the ordinary wages, competed with the white labourer," wrote 19th century political historian James Bryce. "The mob of San Francisco, swelled by disappointed miners from the camps and labourers out of work, men lured from distant homes by the hope of wealth and ease in the land of gold, saw itself on the verge of starvation, while the splendid mansions of speculators, who fifteen years before had kept little shops, rose along the heights of the city, and the newspapers reported their luxurious banquets."

Now, the millionaires and San Francisco's roughly 20,000 Chinese residents -- groups at opposite ends of the economic spectrum --- were about to become the targets of a fierce political movement on the city's streets.